IMHO and from the investigating I have done server location should not matter & it's more a domain extension thing (EG .co.uk for UK) that matters. There is the argument that say's if you are hosted in the US and are targeting say UK sites you should use a UK server but that IMHO would be bad business.
How so? Bad business as it takes away the freedom of choice for website owners to choose their preferred host provider for their own reasons (perhaps customer service for example).
Now 1and1.co.uk for example have thousands of UK clients in the UK and I bet over 50% think they are hosted in the UK when in fact many sites on 1and1 are hosted in Germany.
I have sites hosted in Utah and am beating others for page 1 SERPS (in SEO - example > "hire the best UK SEO") in the UK who are on UK servers so from my experience as the example shows and IMHO it is domain ext thta dictates the most in this regard and not server location.